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Journal of Management Accounting Research
Public and Private Forms of Opportunism within the Organization: A Joint Examination of Budget and Effort Behavior
ABSTRACT: We assert that some forms of opportunistic behavior within the organization are relatively transparent and, therefore, public in nature. Further, while organizations can tightly control such...
ABSTRACT: We assert that some forms of opportunistic behavior within the organization are relatively transparent and, therefore, public in nature. Further, while organizations can tightly control such...
Characteristics of Firms Responding to Underwater Employee Stock Options: Evidence from Traditional Repricings, 6&1 Exchanges, and Makeup Grants
ABSTRACT: I examine the characteristics of firms choosing to respond to underwater employee stock options using one of three stock-option-based responses. A traditional repricing offers a new and lowe...
ABSTRACT: I examine the characteristics of firms choosing to respond to underwater employee stock options using one of three stock-option-based responses. A traditional repricing offers a new and lowe...
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The Assignment of Decision Rights in Formal Information Systems
Journal of Management Accounting Research 20 (1), 83 (2008);
doi: 10.2308/jmar.2008.20.1.83
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ABSTRACT: Contracting theory presumes an uncontestable report on which to base required payments. We demonstrate the importance of decision rights for this central feature of the theory by examining the optimal assignment of the right to choose from a menu of ex ante identical, but noisy, performance measures. We identify conditions where a principal would strictly prefer to assign these rights to an agent even though the choice is made after the report is realized. What is surprising about the result is that neither individual has a natural advantage in making the choice, and the assignment of rights alleviates problems jointly caused by the agent's risk aversion, the principal's inability to commit to a reporting system, and a measurement system that detects shirking better than working. We also identify conditions for which the principal welcomes a larger menu of performance measures from which the principal or the agent can choose.
©2008 American Accounting Association
PUBLICATION DATA
1049-2127 (print)
1558-8033 (online)
American Accounting Association
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